OKLAHOMA CITY, Sept. 21 - OGE Energy Corp. (NYSE: OGE) announced today that its subsidiary, Enogex Inc., has agreed to sell Enogex Arkansas Pipeline Corporation (EAPC), an Enogex subsidiary which owns a 75-percent interest in the NOARK Pipeline System, L.P. to Atlas Pipeline Partners, L.P.
The NOARK Pipeline System assets include a 565-mile Federal Energy Regulatory Commission-regulated interstate pipeline known as Ozark Gas Transmission, extending from southeastern Oklahoma through Arkansas to southeastern Missouri. It also includes a 365-mile unregulated gas-gathering system known as Ozark Gas Gathering, located in eastern Oklahoma and western Arkansas.
The consideration for the shares will be approximately $163 million of cash plus an adjustment for net working capital. A portion of the proceeds will be used to redeem $26 million of outstanding debt associated with the NOARK Pipeline System. The transaction is expected to provide an after-tax book gain of slightly more than $50 million.
The transaction is subject to customary closing conditions and regulatory review by the Federal Trade Commission under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
"The sale of EAPC and the subsequent reinvestment of proceeds are intended to strengthen our asset portfolio, which is part of our overall growth strategy," said Danny Harris, President and Chief Operating Officer of Enogex. "We will continue to look at the right growth opportunities to improve value to our parent company and shareholders.
"The assets included in this transaction are not part of our core business of providing intrastate gas services to numerous customers in Oklahoma including Oklahoma Gas and Electric and Public Service Company of Oklahoma," Harris added.
Lehman Brothers Inc. advised Enogex on the transaction.
Enogex is engaged in natural gas gathering, processing, transportation, storage and marketing. OGE Energy also is parent of Oklahoma Gas and Electric Company, a regulated electric utility with approximately 740,000 customers in a service area spanning 30,000 square miles in Oklahoma and western Arkansas.
